Thoughts from the CEO: A banking change is just around the corner

Anil Stocker July 23, 2014Comments Off on Thoughts from the CEO: A banking change is just around the corner

This is a guest blog from our CEO, Anil Stocker, which was first featured on the Guardian online.

“Last week I appeared in front of the Treasury Select Committee to answer questions on how alternative finance can help small businesses to grow. I wanted to leave the Committee with a clear impression that the business finance market is about to be transformed in a way that will render the old norms of finance completely redundant.

Financial services will be one of the next major international industries to be turned upside down by digital technology. Industries from music, to publishing, to travel have all been made unrecognisable by the impact of the internet. The thought of using a travel agent to book your holiday might feel like a bygone age to many readers, but just ten years ago it was the norm. In five years time we’ll all think it unimaginable to have to wait weeks for a bank branch manager to approve a business loan.

The internet has accelerated everything. In the past, market dominant companies grew steadily over time. Marks and Spencer was founded in 1884, and it was 17 years before they opened a second market stall. Contrast that with Amazon, which was founded in 1994 – last year, after just 19 years in business, Amazon’s revenues were nearly $75 billion. And again contrast that with Facebook, which barely existed 10 years ago, or YouTube which was only founded in 2005.

MarketInvoice has increased business lending by 465% this year alone – compared to a 2.1% fall in lending from banks. By growing 150% year-on-year, alternative finance providers could account for nearly half of the business lending market by 2018. That, frankly, feels conservative against the backdrop of other internet powered industries.

The reason that the internet fosters such growth is that it can deliver better, more transparent products for consumers. Ten years ago, if you wanted to book a holiday you went to a travel agent, where you sat and watched while they punched your details into a computer and you were then told a flat price. You had no way of negotiating a cheaper flight or better hotel other than to walk next door and repeat the process all over again. The internet has made every facet of booking a holiday transparent, and therefore enabled consumers to get a better deal. The same can be achieved for business finance.

We’ve been running MarketInvoice – an alternative finance provider – for a little over three years. This week we hit a big milestone – we have now traded more than £200m of invoices – it took us three years to do the first £100m, and just six months to complete the second £100m.

Before I sat in front of the panel of MPs, they spent over an hour grilling representatives of two of the UK’s biggest banks for a series of fundamental failures in helping business access and understand finance. This only highlighted the contrast between the old and new of business finance. The old world is characterised by opaque products, complex fees and charges, and a lack of customer focus. The new world will be about transparency, speed and accessibility.

Thousands of successful, intelligent businesses are already using alternative finance to grow and explore new opportunities. These businesses are the pioneers of what will soon become a standard practice, like the early customers of eBay or Amazon, and the first viewers of YouTube.”

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About Anil Stocker

Anil Stocker is the CEO and co-founder of MarketInvoice.
While working in financial services in his early twenties and spending time with many CFOs, Anil realised how difficult it was for small businesses to raise the funding they needed.
His ambition was to use technology and data to completely reinvent how businesses go about financing their growth, and breathe fresh life into outdated financial products.
Anil co-founded MarketInvoice in 2011 and has led the business growth over the past six years.